Foreclosure of one’s home is always a very stressful situation and one that everyone wants to avoid. In Massachusetts, homeowners have definite rights, and there are ways to challenge foreclosure documentation and delay or even avoid foreclosure altogether. Our Massachusetts bankruptcy lawyer breaks it down for you in this post.
Foreclosure Do’s and Dont’s
It’s always best to address the situation if you are struggling to make your mortgage payment every month. Return calls and emails. Do not ignore the lender. If you are honest about your situation, the lender may choose to work with you to come up with realistic options to help you keep your home.
Two Kinds of Foreclosure Processes
There are two kinds of foreclosure: judicial and non-judicial. In Massachusetts, non-judicial is allowed, and that is preferable. That type keeps it out of the court’s purview and usually makes the process simpler. When a foreclosure lawsuit is filed, it allows the lender to get a judgment and take over ownership of the house.
Your Rights During a Massachusetts Foreclosure
A Massachusetts bankruptcy lawyer can help you to understand your rights. For instance, Massachusetts homeowners have rights when it comes to timing. Before the bank can foreclose, they are obligated to give you a 90-day notice of default. That gives you time to cure the problem, but you have to catch up on any missed payments before the period expires.
If you are on active duty in the military, the Service Members Military Relief Act [SCRA of 2003] prevents foreclosure. If you are military but inactive you get 90 days.
Actions to Help You Avoid Foreclosure
The Massachusetts attorney general’s office explains several ways to avoid foreclosure:
- Sell your home. Painful though it may be, if it prevents foreclosure it’s worthwhile to consider. You may have to do a short sale, depending on the market. That means selling your home for less than you owe, which is not ideal but still better than foreclosure.
- Contact your lender and ask for a loan modification. You will have to prove you need it, if your payments are current, even if you are struggling.
- Declare bankruptcy – either chapter 13 or chapter 7. This will let you keep your house, but you will have to make the mortgage part of your repayment plan.
- If you still have good credit, consider refinancing. You can always apply for a new loan and negotiate new terms, which may lower your interest and your monthly payment amount.
- Consider a principle-only offer. If you can manage to pay the loan off in cash, not including the interest amount, the bank may take that offer.
- Give the property back to the bank. This is known as a deed in lieu of foreclosure. Make sure you have secured a new home and cleaned out your old one, then hand the deed back to the bank, which should clear the debt.
Regardless of how you choose to deal with imminent foreclosure, Logan A. Weinkauf, P.C. can help you sort out the issues and regain your peace of mind. Contact us today for a consult.